Earlier this morning, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, recovered $3,200 support. The leading altcoin, like the rest of the crypto market, had a bearish September with negative returns, but on-chain indicators suggest that the next month might turn positive, allowing ETH to resume its bullish trend.
The cryptocurrency is presently trading in a price support channel, just over $3,400, which is a major resistance level.
A breach over this resistance mark will also assist Ethereum in breaking out of its major price slump, resuming its bull run.
After breaking out of the downtrend, the next major resistance level would be $3,500, with a retest of $4,000 a distinct possibility.
Ethereum was trading above $4,000 at the beginning of September before falling by about 25% during the next month. The altcoin’s trading volume is still robust.
Ethereum Price Chart – Source: Trading
Ethereum’s exchange supply has been steadily declining in recent weeks, hitting a 6-month low. A falling exchange supply is deemed bullish since it creates a supply shortage and indicates that traders expect the price to rise.
Ethereum supporters appear to be holding, with market analysts predicting new all-time highs in the fourth quarter of 2021.
The Ethereum network has remained stagnant as a result of the rise in popularity of competitor networks such as Solana ($SOL) and now Cardano ($ADA), which seeks to complete it with the inclusion of smart contracts. Another explanation may be because layer 2 solutions are becoming more prevalent.
The number of active addresses has been stable over the last six months, but social traffic has decreased since June, notwithstanding a spike in August around the time of the London hard fork.
ETH was trading at $3,224 when it turned green, indicating that it was preparing for a bullish October. The cryptocurrency is now 24% behind its all-time high of $4,362, but many Ethereum supporters believe it will break through in the fourth quarter.